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Personal Finance
How to know your Gratuity Benefits – Calculator Download

How to know your Gratuity Benefits – Calculator Download

Raviraj Parekh June 14, 2020

Gratuity Calculator

Gratuity is monetary reward paid by an employer at the end of employment. This benefit is applicable if you stay in employment for 5 years or above. It is a mandatory benefit as per payment gratuity act India 1972. This act is applicable to all establishments, where 10 or more employees are working in preceding 12 months. If you are changing your job and want to calculate gratuity benefits here is simple gratuity calculator, eligibility and tax benefits.

Eligibility

  • An individual is eligible for gratuity benefit if he/she has completed 5 years of continuous services in the organization.
  • This benefit is not applicable if employment is terminated due to disability or due to death. In case of death, this benefit is payable to the nominee or legal heir.
  • The maximum amount payable shall not exceed 10 Lakh.
  • The time limit is 30 days of gratuity becoming payable.

Employer needs to pay gratuity amount –

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  • On Resignation
  • On Retirement, Voluntary retirement, Superannuation
  • On Termination or Layoff
  • On Death
  • On Disablement

Application can be made by –

  • An individual eligible employee
  • Nominee of the employee (In case of death)
  • Legal Heir of the employee (If nomination is not made)

Gratuity Calculation –

Gratuity calculation of employee working with company covered by gratuity act is given below.

G = Y x S x 15/26

S = Last Drawn Monthly Salary (Basic + DA)

Y = Number of Years Completed in Service

15 = 15 days salary

26 = Number of working days in month

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Let’s say your last drawn monthly salary is 30,000 Rs and you have worked for organization for 10 years amount payable would be

Gratuity Amount = 30,000 x 15 x 10 / 26 = 1.73 Lac

Download Gratuity Calculator

Calculation

Note – Number of Years would be rounded off to the nearest year. Last 6 months or less to be ignored, however if it is more than 6 months it is to be counted as a full year.

You can download this Calculator from the following link.

Gratuity Calculation

Taxation 

Gratuity amount is taxable if received when you change your job (on resignation) or on termination. This amount falls under the head of “salaries”.

If this amount is paid at the time of retirement, death or superannuation it is tax exempted.

Conclusion –

Gratuity calculator given above will help you in calculating right gratuity amount. If you are planning to change your job just before 5 years, do consider your decision after calculating gratuity amount. You may lose this excellent benefit you are entitled to after completion of 5 years.

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Tags:gratuity Gratuity Benefits gratuity calculation Gratuity Calculator how to gratuity calculate

About The Author

Raviraj Parekh

Raviraj is the man behind moneyexcel.com. He is PGDBA, engaged in blogging for 10 years. Moneyexcel blog is ranked as one of the Top 10 Personal Finance Blog in India. He is not affiliated with any financial product, service provider, agent or broker. The purpose of this blog is to spread financial awareness and help people in achieving excellence for money. Please note that the views expressed on this Blog/Comments are clarifications meant for reference and guidance of the readers to explore further on the topics. These should not be construed as investment advice or legal opinion.

4 Comments

  1. Atul

    Hi,
    I have a three months notice period in my organization and have completed 4 years 7 months. Will i be eligible for gratuity ?

    Regards
    Atul

    June 20, 2015
  2. Raviraj Parekh

    Dear Atul,

    You are not eligible for gratuity benefit.You need to be in continuous service for the 5 years to get this benefit.

    June 20, 2015
  3. Anup HEgde

    I read somewhere about a year being considered as 240 working days?
    Is that a valid reason for Gratuity eligibility?

    August 4, 2015
  4. Raviraj Parekh

    Yes, Anup – Gratuity eligibility is 240 days for the organizations working 6 days a week

    August 6, 2015

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